Unit 2.4 - Globalisation Flashcards
What is globalisation?
The process through which world economies have become steadily more interconnected since the 1970s.
How has globalisation changed the way in which businesses operate?
- The volume of trade between countries has increased
- People have moved overseas to live and work and money has flowed between different countries.
What has aided the speed of globalisation?
- Rising incomes
- Falling transportations costs
- Electronic communication
What is an import?
Where goods and services are brought into the counrty.
What is an export?
Where goods and services are sold to another country.
What has caused an increase of international trade?
- Rise in incomes in different countries.
- Some countries are able to produce goods better than others.
- Emerging economies (China, Barzil, India)
- Reduced transportation costs
What has globalisation encouraged?
Movement of people between different different countries seeking to improve their standard living.
What is another word for the movement of people?
Migration.
What is an MNC?
Multi national country.
What has globalisation led to?
Markets becoming more international.
Name the three benefits for the trend for markets to become worldwide.
- Rapid growth
- Cheaper resources
- Inward investment
Name the three disadvantages for the trend for markets to become worldwide.
- Lots of competition
- New competitors
- Threat of takeover
What is an exchnage rate?
The price of one currency expressed in terms of another.
What are non price factors?
This would cover discounts, promotions, advertising, loyalty cards etc anything that doesn’t affect the selling price of the product.
How does exchange rate affect businesses?
- Increase or decrease in sales
- Increase or decrease in profits.
